FOX Business: The Power to Prosper

The blue chips edged higher as traders mulled increased merger activity, oil prices hitting 2-1/2 year highs and the pace of economic recovery. 

Today's Markets

The Dow Jones Industrial Average was up 23.3 points, or 0.19%, to 12,400, the S&P 500 inched higher by 0.46 point, or 0.03%, to 1,333 and the Nasdaq Composite was off 0.41 point, or 0.01%, to 2,789. The FOX 50 gained 1.2 points to 935.  

Despite light volume on the New York Stock Exchange, the Dow closed at its highest level since June 2008. 

Merger and acquisitions activity has been on the rise in recent weeks.  Texas Instruments (TXN) revealed plans to buy National Semiconductor (NSM) for $25 a share, or $6.5 billion -- sending shares of the chip-maker soaring 70% after the bell. 

Vivendi, a french firm, unveiled plans to purchase Vodafone's (VOD) stake in SFR, France's second largest telecom carrier for $11.3 billion on Monday as well.  

Materials issues posted the biggest gains, with Potash (POT) and Silver Wheaton (SLW) gaining markedly on the day. Technology companies like Apple (AAPL) and Intel (INTC) stumbled. 

A deluge of economic data pointing to moderate improvement in the economy helped lift major stock market averages in the prior week. 

"The March employment report provided further evidence that the labor market is on the mend and that the economy is entering a selfsustaining expansion," Deutsche Bank economists wrote in a research note, citing the better-than-expected jobs report released Friday.

However, as the economy expands at a faster pace, the chance worldwide central banks will begin cutting back on highly expansionary monetary policy in a bid to lessen inflationary pressures increases. Indeed, economists across the world expect the European Central Bank to raise its key interest rate on Thursday. 

In energy markets, oil hit its highest level since September 2008 after jumping 1.1% on Friday.  Continued unrest throughout the Middle East and North Africa paired with the possibility economic expansion will lead to increases crude demand have been putting upward pressure on prices. 

Light, sweet crude edged higher by 53 cents, or 0.49%, to $108.47.  The price of a gallon of regular gas at the pump averaged $3.66 nationwide, up from $3.49 last month and $2.83 last week, according to the AAA Fuel Gauge Report. 

A prolonged increase in gas prices could put a damper on the pace of economic recovery.  Indeed, Goldman Sachs slashed its forecast for first quarter economic expansion one percentage point to 2.5% and warned of risks in the second half of 2011. 

The euro lost 0.18% against the U.S. dollar and the greenback traded 0.14% higher against a basket of world currencies. 

Gold prices jumped $4.10, or 0.29%, to $1,433 after sliding more than $10.00 Friday. 

Corporate News

Wal-Mart (WMT) plans on starting to sell groceries online, according to a report by Bloomberg, citing a source familiar with the program. 

Ford (F) shares got a boost after Credit Suisse raised its price target for the automaker from $17 to $18 and raised its rating from "underperform" to "neutral." 

Google (GOOG) plans on purchasing Nortel Network's portfolio of 6,000 patents for roughly $900 million. Separately, a Swiss regulator said displaying license plates and faces in the search-giant's popular Street View application is a breach of privacy laws. 

McDonald's (MCD) is looking to hire 50,000 new employees at a company-wide hiring event on April 14. 

Southwest Airlines (LUV) cancelled 70 out of 3,400 flights systemwide after a hole in one of its Boeing 737 airplanes caused its cabin to depressurize, prompting an emergency landing Friday.  

Pfizer (PFE) is selling its Capsugel unit, which makes hard capsules, to private equity company KKR for $2.38 billion. 

BP (BP) is nearing a deal with regulators that would allow the oil-giant to resume drilling in the Gulf of Mexico after the Macondo disaster that resulted in a massive oil spill, according to a report by the Sunday Times and the Financial Times

Logitech (LOGI) shares were under pressure on the heels of plummeting 17% Friday after the computer-peripheral maker cut its 2011 guidance. 

Apax Partners, the London-based buyout firm, agreed to buy Epicor Software (EPIC) for $12.50 a share, or $765 million -- an 11% premium to Friday's close. 

Foreign Markets

Global shares were mixed on Monday as traders weighed a likely rate hike from the European Central Bank. 

The English FTSE 100 was up 0.12% to 6,017, the French CAC 40 was down 0.29% to 4,043 and the German DAX edged lower by 0.06% to 7,175. 

In Asia, the Japanese Nikkei 225 gained 0.11% to 9,719 and the Chinese Hang Seng jumped 1.5% to 24,151. 

 

Follow Adam Samson on Twitter @adamsamson.